Canola futures tested major technical support as the calendar flipped to October, with the November contract briefly trading below $600 per tonne before uncovering some buying interest.
With a “head and shoulders” pattern developing on the charts, a move down to the March low of $580 per tonne is possible if support fails to hold at $600. On the other side, nearby resistance can be seen at the 20-day moving average around $620.
Canola prices may have found some reprieve from harvest pressure and a lack of demand from China through some bargain-buying, but the main driver was spillover from a rising Chicago soy complex.
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CBOT November soybeans and December soyoil found their own support levels at US$10 per bushel and 50 U.S. cents per pound, respectively, but a social media post by U.S. President Donald Trump on Oct. 1 saying he’ll talk to Chinese President Xi Jinping about China’s lack of purchases later this month rallied the market. Treasury Secretary Scott Bessent also hinted at an announcement on Oct. 7 regarding assistance for soybean growers.
Both Trump and Canadian Prime Minister Mark Carney want to discuss soybeans and canola, respectively, with Xi, but they have their own matters to deal with. Trump is in the middle of a federal government shutdown resulting in thousands of furloughs and firings, while Carney needs to find support from other political parties to pass the federal budget next month and avoid a non-confidence vote. Oilseeds won’t be on top of their respective agendas.
We can only wait and see if canola’s and soybeans’ rallies have lasting power. Manitoba and Saskatchewan still have approximately 25 per cent left of their canola harvests to complete and should be finished in a matter of weeks. At around the same time, South America’s soybean crop will come off the ground and enter the market, resulting in a new round of Chinese soybean purchases and less demand for U.S. soybeans worldwide. Will oilseeds continue getting support or will their rallies turn out to be dead cat bounces on the way down?
